Good morning! It’s Tuesday, May 28, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: Shareholders Advised Against Elon Musk’s Massive Pay Raise
After it transpired that Tesla was buying advertising to try and convince shareholders to back its massive new pay package for boss Elon Musk, investors are now being urged to vote down the $56 billion pay by an external advisory firm.
Last year, the Tesla board approved a pay package worth as much as $56 billion for Musk, however it was vetoed by Judge Kathaleen McCormick of Delaware’s Court of Chancery earlier this year. Now, the EV maker is putting the pay package to a vote among shareholders. Tesla is asking for approval for the pay and permission to move the company’s base out of Delaware and into Texas, where it will be free to pay Musk whatever he wants.
However, shareholders in the Cybertruck maker are being urged to vote against the $56 billion pay that Tesla has proposed for its boss over fears that Musk isn’t taking his role at the firm seriously and that the pay is simply too much for one person, according to Reuters. As the site reports:
Proxy advisory firm Glass Lewis said on Saturday it has urged Tesla (TSLA.O) shareholders to reject a $56 billion pay package for Chief Executive Officer Elon Musk, which if passed would be the largest pay package for a CEO in corporate America.
The report cited reasons like the “excessive size” of the pay deal, the dilutive effect upon exercise and the concentration of ownership. It also mentioned Musk’s “slate of extraordinarily time-consuming projects” which have expanded with his high-profile purchase of Twitter, now known as X.
The pay package was proposed by Tesla’s board of directors, which has repeatedly come under fire for its close ties with the billionaire. The package has no salary or cash bonus and sets rewards based on Tesla’s market value rising to as much as $650 billion over the 10 years from 2018. The company is currently valued at about $571.6 billion, according to LSEG data.
The advisory firm has also questioned Tesla’s decision to move its state of register out of Delaware and into Texas, a move that shareholders will also vote on. The company argued it brought “additional risks” to Tesla, which is currently struggling to cut costs and remain profitable as it cuts staff across the board and witnesses slowing sales for its models.
2nd Gear: U.S. Regulators Uncover Even More Issues At Waymo
While at least a handful of people truly believe self-driving cars to be the future of American transportation, their launch in the country has been far from smooth. After GM-backed Cruise has been wrapped up in countless Federal investigations, Google-backed Waymo is now facing safety probes of its own.
Federal investigators opened a probe into Waymo’s self-driving cars earlier this month after safety issues were uncovered. Now, the investigation has unearthed nine additional incidents that “raise concerns” about the company, reports Automotive News. As the site explains:
In a letter to Waymo released Friday, NHTSA said it has learned of 9 additional similar incidents.
The agency said several incidents under investigation “involved collisions with clearly visible objects that a competent driver would be expected to avoid.”
NHTSA said “reports include collisions with stationary and semi-stationary objects such as gates and chains, collisions with parked vehicles, and instances in which the (automated driving system) appeared to disobey traffic safety control devices or rules.”
Now, Waymo has until June 11 to explain the incidents that were uncovered by the National Highway Traffic Safety Administration.
The probe is the first step in an NHTSA investigation into Waymo. After uncovering concerns that the company’s self-driving vehicles “exhibiting such unexpected driving behaviors may increase the risk of crash, property damage, and injury,” the federal agency could impose a recall on Waymo’s fleet of self-driving cars if its concerns aren’t addressed.
3rd Gear: Lucid Begins Slashing Its Workforce
If last year was all about automotive recalls sweeping the industry, this year it’s job cuts. After Tesla gutted its teams across the U.S., fellow electric vehicle maker Lucid has now started trimming staff as it looks to cut costs and turn a profit.
The EV maker has trimmed roughly 400 jobs from its U.S. teams, reports Bloomberg, following similar cuts across Tesla and Rivian. Lucid made the cuts as part of an effort to save money after it revealed that it was expecting to make much wider losses in 2024. As Bloomberg explains:
Lucid Group Inc. will eliminate about 400 jobs in the coming months, the latest move by an electric-vehicle maker to cut costs in a dramatically slowing market for plug-in cars.
The reductions, which amount to about 6% of the automaker’s workforce, will be complete by the end of the third quarter, according to a regulatory filing Friday. Lucid expects to incur charges of $21 million to $25 million from the restructuring plan, the bulk of which will be recognized in the current quarter.
The layoffs underscore the challenges for EV makers to scale production while adapting to an environment of waning consumer demand for battery-powered vehicles. EV market leader Tesla Inc. announced last month that it would cut at least 10% of its workforce, while Rivian Automotive Inc. has had multiple instances of layoffs this year.
Lucid has so far not revealed which teams will be affected by the rolling cuts. However, the drop in headcount at the company comes as it prepares to roll out a new model that it hopes will help turn around its balance sheets.
Lucid will roll out the Gravity electric SUV over the coming years, with the new model tipped to have more than 400 miles of range and a price tag of more than six figures.
4th Gear: Now Is A Great Time To Buy A New Car
It’s not all bad news today, however, as it turns out that now might actually be a great time to head out and buy a new car, if reports are to be believed. CNBC News claims that discounts on new cars are more than double what they were a year ago as inventory of certain models stacks up.
According to CNBC News, a “glut” of 2023 cars is leading to massive discounts on some models being passed on to drivers. As the site explains:
Dealerships are sitting on a glut of 2023 vehicles, leading to steeper discounts and lower interest rates than usual, the auto research firm Edmunds said Wednesday. The share of ’23 models available at dealerships nationwide has reached 6.8%, up from 5.4% last year for 2022 models, it found.
Faced with higher inventories, automakers and dealers are offering an average discount of $4,147 on last year’s models, Edmunds said — more than double the $1,919 average for ’22 models a year ago.
The massive discounts bring to an end a period that some experts called the “absolute worst times to buy a vehicle,” according to CNBC. As a result of depleted inventories, product delays and other external factors, the past few years have been an awful time to try and upgrade your daily driver.